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For decades, China has held an easy advantage in negotiations with the United States by making itself more important economically. Beijing has done this by leveraging its position in global supply chains that are critical to US economic security. Washington weakened its negotiating position by pursuing energy policies that left America exposed to China’s strategy. President Trump’s economic and trade actions have changed that number. As Trump prepares to sit across from Xi Jinping in Beijing, the US is positioned to win.
The foundation of this strength starts at home growing up. Trump’s agenda of deregulation and tax reform has spurred investment in American industry after years of stagnation. His administration recognizes that America’s productive and growing economy is not just good for workers; it also serves as an important geopolitical base that allows the US to resist CCP pressure. While China’s growth has weakened, the US economy has been remarkably strong.
This is, in part, due to Trump’s push to introduce domestic energy production, which not only creates good-paying jobs but also ensures that the US economy has the resilience needed to deal with disruptions abroad.
Not so long ago, the US was dependent on the rest of the world for oil and natural gas. Now, Trump’s policies have enabled the US to become a powerhouse and export power. While disruptions in global markets are still hurting American consumers, the impact pales in comparison to pressure from Beijing, which relies on energy imports from countries like Iran and Venezuela to power its manufacturing monopoly. As these sources are cut off, Xi Jinping finds himself in a weak position.
TRUMP’S PLANETARY WAR WITH BEIJING IS PART OF A MULTI-PRONG STRATEGY TO DEFEND AMERICA AGAINST BROAD THREAT.
Trump’s understanding of manufacturing as a key source of national power underpins this agenda. The core of President Trump’s China playbook has been replacing the North American Free Trade Agreement, or NAFTA, with the United States-Mexico-Canada Agreement, or USMCA. Unlike NAFTA, the USMCA better protected workers and was designed to protect our supply chains after becoming dangerously dependent on China.
Sixteen of the 21 major sectors increased exports under the USMCA. In key industries such as petroleum, chemicals and wood, US exports not only grew under the USMCA but also grew faster in Canada and Mexico than in the rest of the world. A prime example is US auto suppliers. By requiring that 75% of the car’s value come from North America, the agreement enables manufacturers to restructure their supply chains away from Chinese factories and back to the continent. US auto parts production now stands at $349 billion annually, more than $37 billion above 2019 levels. The auto supplier industry added 61,000 jobs and now employs more than 930,000 workers in all 50 states. About one-third of all US exports flow to Canada and Mexico within this combined framework.
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This tightening of the supply chain removes Beijing’s power from the negotiating table. China’s strategy has always focused on embedding Chinese manufacturing so deeply into global supply chains that any cost-cutting is too costly for the US. The USMCA directly undermines that strategy. When American manufacturers can source parts from reliable North American partners operating under shared rules, China’s stranglehold weakens.
As Trump prepares to travel to China, he will meet with Xi at an unprecedented economic level, supported by a US domestic economy that has been revitalized by deregulation; a North American manufacturing base producing at record levels; and a trade structure that has greatly reduced dependence on Chinese industrial capacity.
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China now produces about 30% of the world’s manufactured goods while consuming about 18%. That surplus has to go somewhere, and it’s often dumped into world markets, where government subsidies make losses. For many years, that strategy worked because there was no other Western equivalent. President Trump’s North American industrial policy is the first serious response to that challenge. Beijing understands that its interference in the world economy is eroding.
The America First agenda was not simply about closing America off from the world. It was about making sure that when America engages the world, including a powerful rival like China, it does so from a position of strength. That leaves Beijing on the defensive.
